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TMI Blog2016 (9) TMI 708X X X X Extracts X X X X X X X X Extracts X X X X ..... d the interest to the tune of ₹ 53,76,200/- which was disallowed on the ground of that earlier to the relevant assessment year no provision of interest was retained in the account books and when the assessee claimed in the relevant assessment year then the same includes the interest payable to M/s. Sangam India Ltd. for the earlier year also i.e. 2000-01 to onwards. The MOU dated 29.07.2003 no doubt speaks the liability of the assessee to pay the interest but the figure did not match with the explanation of assessee in view of the letter dated 30.06.2011 as discussed above. The MOU never acted upon no payment was made the cheques issued by the assessee were bounced and the claim of the creditors went up to the Hon’ble Bombay High court as well as before the recovery Tribunal. Therefore, in the said circumstances it is a clear case of furnishing the inaccurate particulars just to evade the tax liability, therefore, in the said circumstances the law relied by the representative of the assessee has to no use. - I.T.A. No.7462/Mum/2011 & I.T.A.757/Mum/2010 - - - Dated:- 5-8-2016 - SHRI R.C.SHARMA, AM AND SHRI AMARJIT SINGH, JM For The Assessee : Shri Pramod Kumar Parida a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e same way, interest liability (at varied rates yearwise) which got crystallized during the year, and as a part of addendum to the trading liability, should have been allowed. c) The ld. CIT(A)erred in admitting to allow the alleged interest attributable to the year under consideration (A.Y.2004-05) instead of entire interest on the premise that prior period expenses are not allowable. d) Without prejudice to above, the alleged miscalculation of interest cannot override the chargeability; therefore, the ld. CIT(A) erred in not appreciating to the bonafides of genuine claim. 2. Levy of Penal Interests: The appellant, on merits, denies his liability to penal interest. ISSUE NO.1:- 4. Under issue no.1, the assessee has challenged the addition of interest to the tune of ₹ 53,76,200/- in the income of the assessee. The representative of the assessee has argued that the assessee has to paid the interest to the creditors but did not pay well in time therefore the assessee settled the issue with them out of court in view of the MOU dated 29.07.2003, therefore, he has to pay the interest to the tune of ₹ 53,76,200/- M/s. Sangam India Ltd. an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ribe on record to know about the nature of the transaction which is reproduced as under:- 5.1. The salient features of the MOU are as under: i. Appellant is co-owner of the property at Prithvi Apartment alongwith his brother having 50% share therein. The property was agreed to be sold for an amount of ₹ 2.5 crores to M/s. Sangam India Ltd. and SPBL Ltd. by the appellant and his brother. ii. The appellant was due to pay to M/s. Sangam India Ltd. and SPBL Ltd. on account of purchases made from them and the outstanding amount as on 25.07.2003 was worked out at ₹ 1,24,19,639/- which is inclusive of 16% of interest per annum. The calculation of the amount outstanding was provided in annexure 1 to the MOU. iii. Out of the above liability, an amount of ₹ 57,00,000/- was agreed to be adjusted from the amount payable to the appellant towards sale of the property. After such adjustment, the balance amount payable as on 15.11.2003 was worked at ₹ 70,08,307/- which was inclusive of interest upto 15.11.2003. iv. The said amount of ₹ 70,08,307/- was agreed to be paid by the appellant, by way of 30 monthly post dated cheques starting from 15th Nov. 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e restore the matter back to the file of Assessing Officer to examine the correctness of the interest so claimed with reference to actual amount due to earlier year. Assessing Officer is also directed to verify if assessee had actually made payment of interest in the subsequent year. If the Assessing Officer found that even after making provision in MOU, assessee has not made payment in subsequent year, because more that 7-8 years have been passed after the execution of the MOU, the Assessing Officer will be at the liberty to disallow the same. We directed accordingly. As we have already set aside quantum appeal of assessee. After imposition of penalty assessee is also set aside to Assessing Officer for passing afresh after deciding the quantum as directed by the Tribunal. 7. After the execution of the MOU the appellant and his brother fail to honour the MOU and did not pay the amount to the assessee nor interest paid. In brief the actual amount if any payable to M/s. Sangam India Ltd. and SPBL Ltd. was not paid. Therefore, M/s. Sangam India Ltd. and SPBL Ltd. filed the suit no.985 of 2006 before the Hon ble Bombay High Court. The contention of the assessee in connection with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntioned in the books of account. The said letter also speaks that the interest if any was also belonging to the financial year 2000-2001 to onwards but no provision of interest was mentioned in the books of account. In brief the interest which has been calculated and shown in the Profit Loss A/c. did not match with the annexure 1 of the MOU. No distinguishable material has been placed on record before us. Factually no provision of interest was made in the earlier years when made in view of MOU then the same was not complied with therefore, in view of the said circumstances we are of the view that the CIT(A) has rightly decided the matter correctly and judiciously which does not require to be interfere with at this stage. Accordingly appeal filed by the assessee is dismissed. ITA NO.7462/Mum/2011:- 8. The assessee has raised the following grounds:- 1) The learned CIT(A) has erred in law and in facts in upholding order of AO in levying penalty u/s.271(1)(c) of ₹ 17,45,546/-. 2) The learned CIT(A) has erred in law and in facts that no appeal was filed against the assessment order disallowing interest claimed of ₹ 53,76,200/- when actually appeal aga ..... X X X X Extracts X X X X X X X X Extracts X X X X
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